The purpose of this element is to determine whether or not the company has clear focus. Often new ventures, in an effort to build up multi-billion dollar financials, expand their offering to many different products/services. Does the venture have a clear path for the business, not just offer a mixed bag of various products/services and revenue models? While the attraction to offer the target consumer more than one product/service may seem great on paper, more often this causes dilution in the efforts and stalls all areas of growth. Should investors be excited or afraid of a venture that has 12 different revenue streams?
With a lot of today’s web companies a focused intention turns fuzzy as the management team wrestles with how they will monetize their site. Although there are many great ideas out there, only a small percentage actually build a revenue strategy into their new venture. Instead, they built a “cool” site and try to tack on a monetization strategy after they launch. Thus, a site built around a single idea begins adding features in an effort to become profitable. More features are not always a good thing, as the team will likely lose focus on their original goal. Key point: making money should not be a fuzzy afterthought, but rather should be a central focus.
This is just one of the key criteria forward-thinking investors use when evaluating the strength of entrepreneurs and their new ventures. How do you measure up? Go to www.venturephenomeproject.com to read all 80 criteria and swap knowledge with other entrepreneurs & investors.